DESPITE large crowds there were no bids made at the auction of Bishop's Palace on Saturday.

More than 100 people turned out to the auction of the Sturt Street residence on the weekend but bidders kept their hand in their pockets.

The 1876 heritage listed landmark property was passed in on a vendor bid at $2.7 million, nearly $2 million short of the asking price.

Auctioneer and PRD Nationwide Ballarat chief executive Neil Jens said although the price of the property was a contributing factor to the lack of bids, there was significant interest in the property in the lead-up to the auction.

"We've had a lot of interest from all across Australia including some high-profile figures and good local interest," he said.

Crowds at the auction. PICTURE: KATE HEALY

Mr Jens said approximately 20 people were interested in the unique property including multiple Melbourne buyers and Chinese investors.

Following the auction, agents were in discussions with a potential buyer who made an offer on the property.

Mr Jens said agents are confident the property will sell, and when it does it will be the highest priced property to be sold in Ballarat.

In January the $6.5 million asking price was lowered to $4.5 million-plus as a result of no negotiable sales.

Mr Jens said there was always going to be a unique market interest and it was just a matter of time before a price would be settled upon.

The heritage-listed property at 1444 Sturt Street has had just two owners since it was built by Melbourne architect Josheph Reed, who was also responsible for designing the State Library of Victoria and Melbourne Trades Hall.

Set on 1.37 hectares, the historic palace has six bathrooms and six bedrooms and features a wine cellar, reception hall and spa pavilion.